Organization Structure

Description
This is a presentation highlights on what is organization structure, need for formal organization structure and different forms of organizational structures.

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According to STEPHEN P ROBBINS “An organizational structure defines how job tasks are formally divided, grouped and coordinated.” According to FRED LUTHANS “Organization structure represents the skeleton framework for organizational behavior.” Organisational structure is defined as “the framework of tasks, reporting and authority relationships within which an organisation functions.”

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Facilitating Management Encouraging Growth Optimum Use of Technological Improvement Encouraging Human Use of Human Beings Stimulating Creativity

Departmentalization

Centralization and Decentralization

Chain of command

Elements of organization structure

Work specialisation

Formalization

Span of control

Work Specialization or Division Of Labour refers to the degree to which activities in an organization are subdivided into separate jobs. In essence, individuals specialise in doing part of an activity rather than the entire activity.

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The basis by which jobs are grouped together is called Depatmentalization. The various ways by which Departmentalization can be done are:Functional Product Customer Geographic

Who reports to whom?

How many people can a manager manage?

It refers to the degree to which the jobs within the organisation are standardized. The degree of formalization can vary widely between organizations and within organizations.

Lower

Higher

Low Formalization High Formalization
Higher Lower

Employee Freedom

Standardization

Centralization
Formal decision making authority is held by a few people, usually at the top

Decision making authority is dispersed throughout the organization

Decentralization

Making Decisions in Organizations
High Managerial Control Employee Empowerment High

Centralized Decision Making
Low
Employee Empowerment

Decentralized Decision Making
Managerial Control

Low

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The Line and Staff Organization Structure The Functional Organization Structure The Divisional Organization Structure The Matrix Structure The Project Organization Structure Free form Organization Structure Network Organization Structure

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Line Departments – Substantive (direct) in its contribution to organization’s overall objective
Staff Departments – Objective (indirect) in its contribution to organization’s overall objective

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Line and Staff conflict Reasons of conflict are: • Difference in view points • Lack of Demarcation between Line and Staff • Lack of proper understanding of authority • Different background

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Traditional concept of organising. The basis of departmentation is the various functions to be performed by the organisation. Widely used in medium and large organisations.

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Also known as Profit Decentralization. Organization is divided into fairly autonomous units. Each unit is self contained and directly accountable to the organization.

Basis of Divisionalisation ? Product Divisionalisation ? Territorial Divisionalisation ? Strategic Business Divisionalisation

CEO

Vice President Sales and Marketing

Vice President Research and Development

Vice President Materials Management

Vice President Finance

PDM

PDM

PDM

PDM

Canned Soups Division

Frozen Vegetable Division

Frozen Entrees Division

Baked Goods Division

Centralized support functions Divisions

Geographic Divisionalisation
Regional Operations

Regional Operations

CEO

Central Support Functions

Regional Operations

Individual stores

Regional Operations

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It is the realisation of two dimensional structure which emanates directly from two dimensions of authority. It is in voilation of unity of command.
Matrix = Matrix + Matrix + Matrix + Matrix Organization Structure Systems Culture Behaviour

CEO

Matrix Structure
Vice President Engineering Vice President Sales and Marketing Vice President Finance Vice President Research and Development Vice President Purchasing

Product A Manager

Product B Manager

Product Team

Product C Manager

Product D Manager

Two-boss employee

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Also known as naturalistic, organic or adhocratic form of organiztion structure. Free form structures reduce the emphasis on positions, departments and other formal units, and on the organizational hierarchy. Free form organizations are suitable for those industries which have to work in highly dynamic environments.

Network organization structure
A recent innovation in organizational architecture is the use of network structures. A network structure is a cluster of different organizations whose actions are coordinated by contracts and agreements rather than through a formal hierarchy.

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